Dear Archer North: I am curious to
see if you can deliver on your extravagant promises. Let me know when the system
is live.

People are awesome

The use of management objectives was first widely advocated in the
1950s by the noted management theorist Peter Drucker.

MBO (management by
objectives) methods of performance appraisal are results-oriented. That is, they
seek to measure employee performance by examining the extent to which
predetermined work objectives have been met.

Usually the objectives are
established jointly by the supervisor and subordinate. An example of an
objective for a sales manager might be: Increase the gross monthly sales volume
to $250,000 by 30 June.

Once an objective is agreed, the employee is usually expected to self-audit;
that is, to identify the skills needed to achieve the objective. Typically they
do not rely on others to locate and specify their strengths and weaknesses. They
are expected to monitor their own development and progress.

AdvantagesThe MBO approach overcomes some of the problems that arise as a result of
assuming that the employee traits needed for job success can be reliably
identified and measured.

If the employee meets or
exceeds the set objectives, then he or she has demonstrated an acceptable level
of job performance. Employees are judged according to real outcomes, and not on
their potential for success, or on someone's subjective opinion of their
abilities.

The guiding principle of the
MBO approach is that direct results can be observed, whereas the traits and
attributes of employees (which may or may not contribute to performance) must be
guessed at or inferred.

The MBO method recognizes
the fact that it is difficult to neatly dissect all the complex and varied
elements that go to make up employee performance.

MBO advocates claim that the
performance of employees cannot be broken up into so many constituent parts - as
one might take apart an engine to study it. But put all the parts together and
the performance may be directly observed and measured.

DisadvantagesMBO methods of performance appraisal can give employees a satisfying
sense of autonomy and achievement. But on the downside, they can lead to
unrealistic expectations about what can and cannot be reasonably accomplished.

Supervisors and subordinates
must have very good "reality checking" skills to use MBO appraisal
methods. They will need these skills during the initial stage of objective
setting, and for the purposes of self-auditing and self-monitoring.

Unfortunately, research
studies have shown repeatedly that human beings tend to lack the skills needed
to do their own "reality checking". Nor are these skills easily
conveyed by training. Reality itself is an intensely personal experience, prone
to all forms of perceptual bias.

One of the strengths of the
MBO method is the clarity of purpose that flows from a set of well-articulated
objectives. But this can be a source of weakness also. It has become very
apparent that the modern organization must be flexible to survive. Objectives,
by their very nature, tend to impose a certain rigidity.

Of course, the obvious
answer is to make the objectives more fluid and yielding. But the penalty for
fluidity is loss of clarity. Variable objectives may cause employee confusion.
It is also possible that fluid objectives may be distorted to disguise or
justify failures in performance.